Are We on the Brink of a Depression?

By Glen G., San Antonio, TX

Image Credit: Mary A., Fullerton, CA

What object worth an equivalent of 100,000 pennies can be stacked 480 miles high? If you don't know, the answer is a one-thousand dollar bill. Why would you do such a thing? Because if you stacked one-thousand dollar bills 480 miles on top of each other, it would equal a whopping $7.2 trillion, which equals our national debt. Those 480 miles of $1,000 bills is the distance from San Antonio, Texas to Oklahoma City, Oklahoma. And what is worse, since September 30, 2003, the national debt has increased $1.97 billion on average per day. All the bills you have in your wallet are Federal Reserve notes, which are actually counted as part of the Federal debt (U.N. National Debt Clock). Moreover, currency is only one component of the debt. This, in turn, leads to the foundation of a probable depression in America's future.

According to a March 2004 Miami Herald article, the U.S. debt is "triple its gross domestic product" and the nation is "shouldering a greater debt burden than it did during the Great Depression."

In addition to this outrageous debt, out-sourcing is leaving hundreds of thousands of people jobless, and all so that companies can increase profits. (Out-sourcing is when companies move their manufacturing to foreign countries.) By doing this, they profit by paying less to the overseas workers for the same work. Americans who have lost their jobs now have to work two jobs to earn half what they once made.

Why does this matter? Because it may cause another depression. Just as with the Great Depression of the 1930s, there is a surplus of things to buy, which are the goods we have from those companies that out-source, but nothing to buy them with because the value of the currency goes down because our $7.2 trillion debt is still rising.

What's the solution? The government needs to decrease spending. If that's accomplished, then instead of increasing our debt, we could start re-paying it.

Join the Discussion

You were right in the sense that the economy has entered a downturn. Don't expect the debt to ever go away completely though. It was created so that the government would have a reason to pass taxes. It might get smaller, but it's here to stay.